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25 Cards in this Set
- Front
- Back
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What do long-term liabilities include? |
Long term notes payable, warranty liabilities, lease liabilities, and bonds payable |
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Accounting for liabilities involves addressing what three important questions? |
To whom to pay? When to pay? How much to pay? |
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What are known liabilities also called definitely determinable liabilities? |
They are agreements, contracts, or laws and are measurable. That include: accounts payable, notes payable, payroll, sales taxes, and Unturned revenues, and leases |
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What is the entry to record sales tax? |
Debit cash, credit sales , and credit sales tax payable |
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What is a short term note payable? |
A written promise to pay a specified amount on a definite future date within one year or the company's operating cycle, whichever is longer |
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What is the entry to record a note paid with interest |
Debit notes payable , debit interest expense , and credit cash |
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What is gross pay? |
The total compensation an employee and see including wages, salaries, commissions, bonuses, and any compensation earned before deductions such as taxes |
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What is net pay? |
Also called take-home pay, it is gross pay less all deductions |
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What are payroll deductions? |
Called withholdings, they are amounts withheld from an employee's gross pay either required or voluntary |
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What are the two FICA taxes? |
The Social Security tax and the Medicare tax |
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What are some voluntary deductions? |
Employee request, contract, Union, or other agreements. They can include charitable giving, medical and life insurance premiums, pension contributions, and union dues |
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What are the taxes taken out of an employee's pay? |
FICA social security tax , FICA Medicare tax , and Employee Federal Income Tax. |
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What is the entry to record employee payroll with deductions? |
Debit salaries expense , credit FICA Social Security tax payable, credit FICA Medicare tax payable , credit Employee Federal Income Tax payable, and credit salaries payable |
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What are all the employer payroll taxes? |
FICA Social Security, FICA Medicare, futa tax , and suta tax |
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What's the entry to record employers payroll taxes |
Debit payroll tax expense, credit FICA Social Security tax payable, credit FICA Medicare tax payable, credit State unemployment tax (Suta) payable, and credit federal unemployment tax (futa) payable |
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What does the current portion of long-term debt refer to? |
The part of the long-term debt due within one year or the operating cycle |
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What is an estimated liability? |
A known obligation that is of an uncertain amount but that can be reasonably estimated |
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What are employee benefits? |
Benefits that go beyond salaries and wages including Medical, Dental, life, and disability insurance |
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What is a warranty? |
A seller's obligation to replace or correct a product or service that fails to perform as expected within a specified period |
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What is the entry to record estimated warranty expense |
Debit warranty expense and credit estimated warranty liability |
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What is the entry to record cost of warranty repairs? |
Debit estimated warranty liability and credit auto parts inventory |
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What is a contingent liability? |
A potential obligation that depends on a future event arising from a past transaction or event |
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When do we record a contingent liability? |
When it is probable and estimable , but if it is probable or possible and nonestimable we disclose it in the statement notes |
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What are some examples of contingent liabilities? |
Potential legal claims , debt guarantees, and other contingencies |
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What is the times interest earned ratio? |
Income before interest expense and income taxes ÷ interest expense |
